Employment figures set to show Britain's gravity-defying labour market is heading back to earth

Britain's gravity-defying labour market is heading back to earth, figures are set to show this week.

Until now employment has ridden out a double-dip recession and confounded predictions of a return to the ever-lengthening dole queues of the Eighties.

Firms have seemed willing to hire more people to do less – the number in work is 66,000 higher than at the start of 2008, despite output being three per cent lower than then.

But with no end in sight to the economy’s poor performance, underlined in the Autumn Statement by George Osborne, it is thought employers are getting cold feet, with the result that the jobs scene could darken as winter draws in.

‘The tone is one of greater caution, with cuts in investment and employment,’ said Chris Williamson of financial information group Markit. ‘Until now there has been strong private sector employment growth. It may not have been in high-quality, full-time jobs but it was growth.

‘Now even that is showing signs of disappearing as the economic outlook is growing dimmer by the day.’

Ross Walker, economist at Royal Bank of Scotland, said: ‘The labour market has performed better than expected, especially through the summer, but there are early signs that this is beginning to unwind.

‘Profit-making firms are likely to have been “front loading” workforces in anticipation of an upturn. This week’s figures may signal that they are having second thoughts.’

The latest labour market statistics are due on Wednesday. The traditional claimant-count measure of joblessness for October was 1.58 million, up 10,100 from September but down 10,900 from a year earlier.

By the wider labour force survey
measure, there were 2.51 million unemployed in July to September 2012,
down 49,000 from April to June 2012 and down 110,000 from a year
earlier.

According to
the survey, part-time employment grew by four per cent in the third
quarter of this year compared with the same period last year, while
full-time employment grew by just 0.9 per cent over the same period.